Global marine insurance report - Studio Legale Lauro · 2014-11-25 · Global marine insurance...
Transcript of Global marine insurance report - Studio Legale Lauro · 2014-11-25 · Global marine insurance...
Global marine insurancereportPatrizia Kern, Head Marine, Shipping & Law 2014
Patrizia Kern | Head Marine | Shipping & Law 2014 2
Agenda
• Hull Overview
• Offshore Energy Overview
• Outlook
Patrizia Kern | Head Marine | Shipping & Law 2014
Hull Overview
3
Patrizia Kern | Head Marine | Shipping & Law 2014
In 2013 worldwide premium volume has totalledto USD 34.2 billion …
Total: 34.2 USD billionChange 2012 to 2013: -1.7%
Marine Premium 2013 - By line of business
Patrizia Kern | Head Marine | Shipping & Law 2014
Total: 8.53 USD billionChange 2012 to 2013: -0.8%
… with Hull remaining largely unchanged incomparison to last year …Hull Premium 2013 - By region
Patrizia Kern | Head Marine | Shipping & Law 2014
**** includes proportionaland facultative reinsurance *
* Norway, Denmark,Finland, Sweden
… which is also reflected by the various marketshares …
Hull Premium 2013 - By markets
Patrizia Kern | Head Marine | Shipping & Law 2014
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
UK (Lloyds)
Nordic
China
Japan
Latin America
UK (IUA)
France, Italy, USA, others: some increase until 2008/2009, some decrease since.
Before 2010: only Mexico and/or Brazil
From 2012: extended data survey
… as well as in the momentum of premiumgrowth …Hull Premium 2004 - 2013 – selected markets
Patrizia Kern | Head Marine | Shipping & Law 2014
50 %
75 %
100 %
125 %
150 %
175 %
200 %
225 %
250 %
275 %19
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
14
Gross tonnage(> 300 GT)
Av. insured vesselvalue (Renewals &newbuilds - Cefor)
Global Marine HullPremium
No. Ships (> 300 GT)
Sources: Insured vessel values: Cefor NoMIS statistics ; No. Ships & tonnage: ISL Bremen
Hull Premium / World Merchant FleetIndex of evolution, 1995 = 100%
… however premiums are not growing at thesame pace as world tonnage
Patrizia Kern | Head Marine | Shipping & Law 2014
0%
20%
40%
60%
80%
100%
120%
140%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2011Strong major loss impact(Costa Concordia &others)
2012/2013Less major loss impactas in 2011.
2013
Improvement buttechnical result still atloss (18th year)
Hull – Gross* Ultimate Loss Ratio Europe/USA**, Underwriting years 1996 to 2013
* Technical break even: gross lossratio does not exceed 100% minusthe expense ratio (usually 20%-30%acquisition cost, capital cost,management expenses)** Data: Belgium, France, Germany,NL, Italy, Spain (until 2007), UK, USA
CostaConcordiapeak
There are some improvements…
Patrizia Kern | Head Marine | Shipping & Law 2014
24%
10%16%
28%
6%
13%
28%
18%
29%
11%
33%35%
22%17%
32%
21%
54%
31%
5%
0%
10%
20%
30%
40%
50%
60%19
96
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Claims in excess of 10 MUSDas % of total claim cost
Claims xs 10 USD million as % of total cost
Cefor NoMIS statistics, as of June 2014 (claims reflect 100% of each vessel)
Record-low impact ofmajor losses in 2014.
Accidentyear
…but only thanks to lack of major losses …
Patrizia Kern | Head Marine | Shipping & Law 2014
40%
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6
2008
2009
2010
2011
2012
2013
2011:Unprecedented total lossimpact.
2012:
Similar to pre- CostaConcordia years.
2013Starts better.
Hull – Gross* Reported Loss Ratio Europe/USA**, Underwriting years 1996 to 2013
* Technical break even: gross loss ratio does not exceed 100% minus the expense ratio (usually 20%-30% acquisition cost, capital cost, management expenses)** Data: Belgium, France, Germany, NL, Italy, Spain (until 2007), UK, USA
Costa Concordia peak
… however how sustainable is the change?
Patrizia Kern | Head Marine | Shipping & Law 2014
As …
… missing claims experience does not mean no risk… major claims cannot be assessed from one year
– Need to monitor longer time period
– Need to know actual insured risk – potential for claims not yet experienced (CostaConcordia, Emma Mærsk, MOL Comfort,...)
– Need to extrapolate from existing claims experience to areas with less or no statisticaldata.
Patrizia Kern | Head Marine | Shipping & Law 2014
Orderbooks have further increased …
13
Total value of Newbuilding orderbook as of 1st August 2014 is US$311.8 bncompared to US$279.4 bn in 2013 (both at contracted values)
Source: Clarkson Research, August 2014 & August 2013.
by Vessel Type by Country/Region of Build
0
20
40
60
80
100
120
140
160
Tank
ers
Bulk
ers
Con
tain
er/ M
PP Gas
Oth
ers
US$
billio
n
Orderbook 2013 Orderbook 2014
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Japa
n
Sout
h Ko
rea
Taiw
an
P.R.
Chi
na
Oth
er A
sia
Euro
pe
Braz
il
USA
Oth
ers
US$
billio
n
Orderbook 2013 Orderbook 2014
Patrizia Kern | Head Marine | Shipping & Law 2014
… as average age of world fleet has decreased …
14
Source: Clarkson Research, August 2014.Note (1): Includes all vessels in these categories above 100 GT.
Note (2): Average age is calculated using number of vessels. Calculations are based on year and month of build.
0
5
10
15
20
25
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Aver
age
Age
Total Tanker Bulkcarrier Containership/MPP Gas Others
Average Age of the World Fleet 2000-2014
Patrizia Kern | Head Marine | Shipping & Law 2014
6.0% 6.3%
3.1%
8.5%
5.1%
-14.8%
-9.0%
-3.8%
-7.2%-5.0%
-2.6%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%20
04
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Average annual change in insured valueson renewed vesselsChange in insured values on renewal
= insured value on renewal / insured value previous underwriting year for same vessel
Financial crisiseffect
Source: Cefor NoMIS statistics as of June 2014
… as well as insured values …
Patrizia Kern | Head Marine | Shipping & Law 2014
0%
1%
2%
3%
4%
5%
6%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Portfolio share of vessels with values xs 100 USD million
> 300 MUSD
100 - 300 MUSD
Vessels with values xs 100 USD million as % of total insured portfolio:
Source: Cefor NoMIS statistics as of June 2014
… whilst the inflow of high-value vessels continues
Patrizia Kern | Head Marine | Shipping & Law 2014
Hence …
… claim frequency is down after peak in 2008 with a positive tostable long-term trend… long-term positive total loss frequency trend… repair cost is down after peak in 2008 and stable to decreasingsince… major losses had a strong impact on 2011 results and otheryears whilst impact next to none in first half year 2014… world fleet will continue to grow, especially in tonnage… value reduction will normalise when it comes to renewalswhilst inflow of high-value vessel continues
Patrizia Kern | Head Marine | Shipping & Law 2014
… meaning
… world fleet continues to grow, insured risk increases, global hullpremium stays flat… Claims cost & frequency improve, but major claims risk cannot
be judged from one year and follows exposure… technical results still at loss for 18th consecutive year; some
improvements expected due to reduction in claims cost… for sustainability all risk aspects must be considered
Patrizia Kern | Head Marine | Shipping & Law 2014
Offshore Energy Overview
19
Patrizia Kern | Head Marine | Shipping & Law 2014
Offshore Energy Premium 2013
*
* incl. proportional andfacultative reinsurance
Total: 5.2 USD billionChange 2012 to 2013: -7.5%
No data: Kazakhstan.
In 2013 offshore energy premium has totalled toUSD 5.2 billion …
Patrizia Kern | Head Marine | Shipping & Law 2014
Offshore Energy Premium 2004-2013
* Nordic, Nigeria, Mexico: no data available before indicated year; UK- IUA: from 2012 extended data survey; Kazakhstan: no data available
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other
USA
Nordic (2011)
Nigeria (2008)
Mexico (2010)
Malaysia
Japan
Italy
India
Brazil
UK-IUA (2012)
UK-Lloyds
*
*
*
*
… with London continuing to play the leading role
Patrizia Kern | Head Marine | Shipping & Law 2014
0%
100%
200%
300%
400%
500%
600%20
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
14
Average Day Rates
Global Offshore EnergyPremium
Oil price, Brent Crude
No. Contracted Rigs
Offshore energy premium - Energy mobiles, day rates, oil priceIndex of evolution, 2000 = 100%
Strong Global Growth …
Patrizia Kern | Head Marine | Shipping & Law 2014
0%
50%
100%
150%
200%
250%
300%
350%19
96
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
outstanding
paid 12th year
paid 11th year
paid 10th year
paid 9th year
paid 8th year
paid 7th year
paid 6th year
paid 5th year
paid 4th year
paid 3rd year
paid 2nd year
paid 1st year
2005Katrina & Rita
2004Ivan
2008Ike
2009-13 no majorhurricane activity
Offshore Energy – Gross Loss Ratios incl. liability - Underwriting years 1996 to 2013, UK and US data
As of December 2013:
… as well as reduced impact of hurricanes inthe last years …
… have influenced premium development
Patrizia Kern | Head Marine | Shipping & Law 2014
Outlook
24
Patrizia Kern | Head Marine | Shipping & Law 2014 25
Trade growth is expected to accelerate fromcurrent levels relative to GDP …
… however likelihood of permanent change in thetrade intensity of production is increasing …
0
50
100
150
200
250
300
350
2000 2003 2006 2009 2012 2015 2018 2021 2024
World export of goods (real)
World GDP (real)
2000=100
Forecast
Source: Swiss Re Economic Research & Consulting
Patrizia Kern | Head Marine | Shipping & Law 2014
… as Asia is expected to dominate globalcontainer flows in 2020
1. Includes exports and intra-regional trade only as these have been identified as drivers of cargo shipmentsNote: Container flows based on forecasts excluding empties and transshipment but including domestic for intra-regional trade; some trades excludedfor display purposes; Turkey and Russia included
Global container flows by main trades, forecast 2020 (MTEU)
= Other routes
= Asia related1
(4.3%)
(6.7%)
(6.9%)
(7.1%)
(3.0%)(4.7%)
5.2
20
20
2.92.7
0.73.7
5.2
(3.5%)
(4.3%)
(6.7%)15
(3.7%)
2.9
(8.0%)
2.6
64(6.8%)
(7.1%) 2.9
4.44.5(6.8%)
(4.6%)(8.8%)
2.5
= Europe related1
4.5
(x%) = CAGR
26
(4.7%)
(4.0%)26
(10.6%)
Source: BCG container flow forecast model
Patrizia Kern | Head Marine | Shipping & Law 2014 27
To summarize …… economic recovery is likely to be shallow and gradual… inflation expectations remain well contained giving centralbanks scope to stick with their current monetary policy… permanent change in trade intensity of production to affectlong-run demand for marine insurance
Patrizia Kern | Head Marine | Shipping & Law 2014 28
… meaning for marine insurance… uncertainty in respect to marine premium… a persistent capacity inflow… continued pressure on rates… London remaining largest Marine Insurance hub, howevertrade is shifting to Asia and Latin America… Big Data and Smart Analytics being the key for future success
Patrizia Kern | Head Marine | Shipping & Law 2014 29
Patrizia Kern | Head Marine | Shipping & Law 2014
Legal notice
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